The 90D+ delinquency (DQ) rate on loans insured by the Federal Housing Administration (FHA), which captures loans that are 90 or more days delinquent but not in foreclosure or bankruptcy, has increased sharply. At 3.57% in September 2025, it has since risen to 5.23% in January 2026, an increase of 1.66 percentage points (pp) in just 4 months. Market commentators have cited this sharp increase in the FHA 90D+ DQ rate as a sign of financial stress among FHA borrowers.
However, 92% (1.53pp) of the increase in the FHA 90D+ DQ rate noted above is driven by how an FHA policy change is reported rather than increasing financial fragility among FHA borrowers. Beginning in October 2025, FHA began requiring Trial Payment Plans (TPPs) for borrowers entering a home retention option. Rather than transitioning directly to current after entering the home retention option, as had previously been FHA’s practice, borrowers must now make 3 consecutive payments before their loan is marked current. Therefore, loans are now classified as 90D+ DQ for at least 3 additional months, which creates a corresponding increase in the FHA 90D+ DQ rate.
As shown in Figure 1, absent the reporting change, the FHA 90D+ DQ rate would have increased modestly over the last few months to 3.70% in January 2026, an increase of just 0.13%. The 1.53pp “TPP gap” shown in Figure 1 – the difference between the reported rate and our revision that removes the impact of the policy-driven reporting change – will persist. Therefore, any comparisons of FHA 90D+ DQ rates across the October 2025 TPP-policy implementation threshold should be adjusted accordingly.
TPPs are an important improvement in the FHA home retention program, as they allow the borrower to demonstrate that the provided solution is affordable before it is made permanent and FHA absorbs the cost. Therefore, the impact of the TPP requirement on FHA’s 90D+ DQ rate should not be misinterpreted—FHA loan performance has been remarkably stable over the last 12 months.